CEO Pay Keeps Rising: What’s Wrong With That?

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I was moving this past weekend, otherwise the front page of the Dispatch on Saturday would have had me sitting down to write a post immediately.

The headline: “Pay for CEOs setting records again”

If you’ve read this blog before, you know that at One Ohio Now we’re advocating for great public services because they lead to stronger communities.  And you also know that we need revenue to pay for those services.  So what’s the tie to this article?

In our economy there are winners and there are losers.  So, while CEOs are setting records might mean that everyone is doing so well and they’re just at the top of the food chain, it does not mean that at all.  Instead, we’re seeing article after article in the same paper about cuts to school funding, pensions, and more.  This is while there are tax loopholes for time shares for private jets.

I see this headline and wonder yet again, why are our priorities so out of whack?  What is it going to take to get us investing in a future for everyone?

The Answer: Renewed Investment, Not More Cuts

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Governor Kasich talked with the Cincinnati Enquirer’s editors and reporters recently and said he’d veto any legislation that restores local government funds, which were cut by $1 billion in the 2011 budget.  He’s simultaneously said he doesn’t want taxes raised by local communities.  But when firefighters are being laid off and drop out rates are going up, what does he expect?

When public services are cut, communities feel the impacts – in many ways.  In the short term, there are less programs and services that make our lives and communities stronger.  Plus, when people lose their jobs as a result of cuts, there are less community members with income to pay for goods and services to keep local businesses strong.  In the longer term, cuts to public services like education mean we have less highly skilled citizens with the tools necessary to find meaningful work, and businesses will be less likely to find the staff who can effectively meet their needs.

Investments in public services create jobs and grow the economy – now and into the future.  After the massive cuts of the 2011 budget, investment is the answer.  More cuts will only harm our communities.

Myths: Rich = Job Creators, Cutting Taxes = Economic Growth

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Are you hip to TED Talks?  There are a wealth of fascinating presentations on a wide variety of topics.  But they often skip politics and policy because of a desire to avoid partisanship.

Here’s one Talk TED initially didn’t post (via Upworthy – as great a daily email as I’ve found), but after some push it made it and has since gotten over 300,000 views.  Read the backstory here (as told by TED).  The basic gist is that a self-described 1%er, Nick Hanauer, attempts to de-bunk the myths that the rich are job creators and that cutting taxes leads to economic growth for all.

Now, whether or not you agree with the full presentation, it does posit some interesting ideas.  But if you’ve got proof that this whole cut taxes to grow the economy thing works, can you send me proof?  I’d be very interested to read it.

It’s a Matter of Choices

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This Saturday’s Dispatch article on companies seeking to lower their tax bills helps highlight the choices we need to make here in Ohio.  AEP said its headquarters have dropped from a value of $68 million to $23 million, which would save the company $1.3 million in property taxes to fund local schools.  AEP reported $3.6 billion in revenue in the first quarter of 2012 and in 2011 CEO Michael Morris made $8.65 million.  I don’t know what their building is really worth, but the question this raises is who benefits from wealth in our communities.  For example:

- Marathon Petroleum reported $596 million in net income in the first quarter of 2012.  So why did the state give them $80 million in May of 2011 right in the midst of billions of dollars of cuts to public education?

- Amazon.com reported $130 million in net income in the first quarter of 2012.  So why aren’t they required to collect sales taxes like mom and pop retailers in Ohio?  This loophole is costing Ohio hundreds of millions of dollars.

These are just two examples, but too many more similar questions exist.  What future do we want to see for Ohio, and who should it benefit?

Fracking: Someone’s Got to Look Out for the Common Good

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All across the country, states are trying to figure out what to do about fracking.  Some see the discovery of oil and gas deposits as presenting unprecedented opportunity, while many are extremely concerned about earthquakes and other ill effects of the practice by drillers.

There will be all sorts of effects in communities as a result of the changes that fracking will bring.  For example, this week, a study released by the CDC Association found that there is not enough affordable rental housing in Appalachian counties of Ohio.  Without changes to environmental regulation, the boom will likely grow.  This will lead to more and more low-income and working class residents in Appalachia and beyond (the Utica shale extends to Columbus) who cannot afford housing as more wells are drilled and pumps are active.

From the impact on the environment to the impact on roads, schools, and housing – fracking is a major issue that it’s clear we’re not entirely prepared to deal with in Ohio.  And if it the practice is going to happen, we should certainly be raising taxes on the drillers to ensure that all Ohioans benefit from the natural resource deep beneath the surface.  At a minimum, we need to make sure that someone is looking out for the common good in Ohio – in the short term and for future generations.

Support for a Tax!? Sort of.

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The Columbus Dispatch has a story today about Ohioans polled regarding their support for a severance/income tax swap.  For those of you that aren’t quite as wonky as most of the people I hang around – the swap is Governor Kasich’s proposal to increase the tax on oil and gas drilling in Eastern Ohio (the “fracking” or simply “frack” tax you may have heard about) and then use that new revenue to pay for an income tax cut.

But the part of the article that really jumped out to me was that Ohioans are for the oil and gas drilling tax, even without the income tax cut, by 2o points (were italics and then bold too much for you to handle?).  So, after over 30 years of anti-tax rhetoric, it’s nice to see that Ohioans – Republicans, Democrats, and Independents – all are in favor of raising taxes at least sometimes.  That’s something to build from, although we still have a long way to go in educating folks.

Policy Matters Ohio has certainly been doing their part to increase education.  This report from March shows how little most Ohioans would get in the swap.  Because our income tax is progressive, the wealthiest Ohioans would benefit by far the most from an across the board reduction, while most of us wouldn’t even be able to fill up our gas tanks.

Our coalition, One Ohio Now, has long been calling for a balanced approach to balancing the budget – to look at both income and expenses.  So, seeing public support for a tax, even one that seems so clear cut as reasonable and necessary, is notable.  Now, if we can just get the Governor and legislature in line with Ohioans’ feelings about the need for big corporations and rich Ohioans to pay their fair share, maybe we can restore the billions in cuts made to public education, local government, and more (a guy can dream, right?).

Some (Recent) History Would Help: Major School Cuts Happened Just Last Year

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The past month or so has brought a slew of tough news for teachers in Ohio’s 3 C’s – Cleveland, Cincinnati, and Columbus.

First, there was the announcement that Cleveland Public Schools are looking at cutting 650 teachers.

Second, came the school cuts in Cincinnati.

Finally, this piece about Columbus’ pending school budget deficit.

All three cities lost tens of millions of dollars in the last budget cycle. That’s tens of millions of dollars that could be used to ensure teachers jobs are saved and class sizes stay reasonable.

After a total of $1.8 billion in cuts, it shouldn’t be a surprise, and it would be helpful to let readers know at least some of the context to the current funding issues that schools are having across Ohio.

UPDATE: It’s not just the 3C’s – Akron just announced cutting 139 teachers.

Warren Buffet’s Not the Only One

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Warren Buffet may have a rule to his name, but Stephen King is on board too as one of the many wealthy folks around the country who believe they should pay higher taxes (hat tip to the consistently good Baseline Scenario).

From Chuck Collins’ Robin Hood Was Right to the Patriotic Millionaires consistent stands to the awesome activists of Resource Generation, there are a lot of good folks out there making the case for the richest amongst us to pay their fair share.

Here in Ohio, it would be great to hear the same from some of our state’s wealthiest.  Anybody Les Wexner‘s cousin?  How about a friend of Randy Lerner‘s?  Peter Lewis is almost certainly on board.